contracts: exemption clauses and termination of contract

Question 1

define an exemption clause

Answer 1

a clause which excludes a party of all liability for breech of contract

Question 2

define a limitation clause

Answer 2

a clause which limits a parties liability for a breech of contract

Question 3

examples of when these clauses are used

Answer 3

• car parks making themselves exempt from lability if any vehicles are damaged on their property
• airlines having exemption clauses limiting their liability for lost damages

Question 4

why can these causes he open to abuse

Answer 4

a contract is meant to be legally binding with peopple having to honour ther obigations, the idea of being able to break obligations and pay no damages for this can be open to abuse

Question 5

the incorporation control

Answer 5

• one way that the abuse of these terms is controlled is that the exemption Clause must be clearly presented to someone before the contract is signed and it must be visibile.
  ie. companies cant add exemption clauses after the contract has been made and they cant put them in the fine print

case: olley v Marlborough court

Question 6

how has the inclusion contrl changes how business operate

Answer 6

hotels and car parks used to make you pay before entering however due to legal proceedings and the fact that exemption clasues have to be presented bfore the contract is signed these tow industries now make you pay after

Question 7

government statute control

Answer 7

• statutory laws made by the governemtn cna protect people from these clauses
• for example section 31 of the sonumer rights act prohibits traders from adding unfair exemption clauses on sale of goods
• traders canot add exemption clasues for stisfactory nature of goods, fit for purpose or fitting description

Question 8

why does governemtn statute have to control this

Answer 8

especially in consumer contracts where many people just tick te terms and agreemtns without reading them it protects consumers from agreeing to things that are unfair

Question 9

what types of terms does section 31 of the CRA cover and not cover

Answer 9

• only protects consumers when there are non negotiable terms. ie when you HAVE to agree to their terms and conditions before buying
• this doesn’t protect contracts with negotiable terms such as tenancy agreements t this is because through this negotiation you re accepting the rest of their terms yu are judging if they are unfair or not

Question 10

what transactions does section 31 not apply to?

Answer 10

doesnt apply to consumer contracts made between consumer and another consumer such as at a car boot sale
- once you pay you cant go back on the contract. this is because you have seen the product
this is called ‘let the buyer be known’ what you see is what you get

Question 11

clauses that are completely ineffective control

Answer 11

• a company can exclude its liability if you die or suffer personal injury through a waiver, unless they die because of the companies negligence
• this applies to dangerous actives like bungee jumpings
• if someone signs the disclaimer and dies the company cna only rely on this limitation clause if it has been prove there was no negligence (ie the staff were properly trained and rope was stored prperly)
• if it was found to be a death or injury due to egligence they cannot rely on this clause

Question 12

termination of contract through performance

Answer 12

• both parties must perform the consideration they have promised to do in accordance to the contract for a contract to be fufilled and discharged

Question 13

acceptance of partial performance

Answer 13

since the cutter v powell case the law has sopftened the blow of only being able to be paid once the full perfomance in the contract has happened

acception of partial performance menas that the other party can accept the performance that has partially be done and pay a reasonable price as to what they recieved from that person up to the time the contract was breeches

Question 14

agreement to terminate contract

Answer 14

• an agreement that started a contract can be agreed to end the contract
• in an employment contract it will state the amount of weeks notice you must give to terminate that contract
• therfore an agreement can termiante a contract

Question 15

frustration or impossibility to terminate a contract

Answer 15

• if a party of the contract cannot be performed becuase something that is beyond the parties control the contract can be frustrated
• if the court frsutrates a contract no damages can be paid

Question 16

frustrated contracts act

Answer 16

allows a proportion of blame to occur
- is someone incurrred some expense up to the point of frustration they can get some oney form the other party for thier determent
- ie. blame is put on one part despite issues eing out of their ocntrol to gie the injured party some compensation

Question 17

breach of contract

Answer 17

• breech of main terms of contract can lead to termination with damages and repudation

Question 18

what are liquidated damages?

Answer 18

• the pre-agreed damages that are stipulated in a contract in THE FORM OF A LIMITATION CLAUSE
• in the event of a term being breaches x amount will be paid in damages

Question 19

how are liquid damages protected from being abused

Answer 19

the limitation clause containing the liquidated damages cannot be extortionate
they have to be calculated as a genuine estimate of what hte injured party would have lost if this clause hasnt been met
if the damages are extortionte they coudl be ‘in terroram’ and subject to prosection

ex. cant change 1,000 pounds for every day that constuctions workers have goen over the agred completion date

Question 20

what are unliquidated damages?

Answer 20

an amount decided by the judge using the principle of wanting to put the injured party int the position as if the contract had been completed
- ex if a tenant doeesnt pay their month of rent then the landlord will be compnesated that last months rent in unliqudates damages

Question 21

what are nominal damages

Answer 21

when there has been a clear breech fo contract but the injured party didnt suffer any financial loss they can be given nominal damages of usually 1 or 2 pounds dependnet on the breech

Question 22

what is mitigating loss?

Answer 22

if you are sacked form a job you are expected to mitigate the loss (ie. look for another job) in the meanting while you are sueing for compensation

Question 23

what are the different equtable remedies?

Answer 23

• specific performance request ( ex if an artefact was promised and it wasn’t about money then the court can rule that it has to be handed over as a equitable remedy
• recession ( contract recidned andparties put to their pre contract position)
• injunctions ( cna prohibit a breech you can see happening by putting an injuction in

Question 24

what time limits are their for filg for breech of contract

Answer 24

• 6 years to claim fr breech of contract ad 12 years for cases involving land